From our conversations with companies, we typically find that employee benefits are often viewed as a cost, rather than an investment. However, we believe that employee benefits are foundational to transformational change; they have the power to elevate a company’s value as an employer and define its culture – and ultimately, boost the bottom line. Providing a comprehensive benefits package can provide significant – and sometimes overlooked – advantages that go far beyond the immediate cost.
Better Customer Experience
One of the most indirect yet impactful reasons to invest in employee benefits is the enhancement of the company’s customer experience. Employees who are satisfied and motivated are more likely to go the extra mile for customers, providing better service and fostering stronger relationships [1].
When employees feel supported by their employer through the benefits on offer, they can be more engaged and motivated. This positive attitude can translate into more attentive and effective customer service, ultimately boosting customer satisfaction and loyalty.
Reducing Future Risks
Mitigating emerging risks should be an integral part of a benefits strategy. A good first step is to undertake a gap analysis, enabling companies to focus on reducing future risks by closing current gaps in provision. Our Mind the Gap research has found that attitudes towards childcare commitments and work life balance approaches are changing amongst employees [3], and this signals the ever-changing demands of employees within the workplace.
Companies also need to consider that risks are often multi-dimensional; many of the issues employees face are likely to be interconnected; for example, an employee experiencing financial stress might also feel that their mental health is strained.
A company that fosters a healthier and more satisfied workforce could see better retention rates and lower long-term healthcare costs. It is important to ensure that measures are sustainable, relevant, and utilised.
Improved Return on Investment (ROI)
Rising costs inevitably mean that there is a heightened focus on reducing the cost of employee benefits; companies are faced with a more competitive talent landscape, worsening health, and low engagement – with 28% of employees not accessing information about the benefits on offer to them [3].
Investing in benefits for employees yields various returns that extend far beyond the immediate cost. A happier and healthier workforce will likely translate into increased productivity, reduced turnover, and improved employee engagement. A positive culture with a focus on employee wellbeing can lead to lower recruitment costs and increased retention which will further drive long-term profitability. The return on investment (ROI) for companies should not be measured just in immediate financial terms but in reduced absence, increased uptake and improved employee wellbeing.
Reduced Employee Turnover
Employee benefits play a pivotal role in shaping the employee-employer relationship.
Turnover of employees is a costly issue that many companies face, the expenses associated with recruiting, hiring, and training new employees can be substantial. Offering competitive benefits is a powerful tool for attracting and retaining talent; employees are increasingly seeking employers who proactively prioritise their wellbeing – 24% want more support with their own mental health, and 29% want more support with their own physical health [3].
By providing benefits that are both what employees need and are competitive within their industry, companies could reduce their staff turnover, and the costs incurred throughout the recruitment process.
Improved Workplace Culture
A strong, positive workplace culture is crucial for the success of any company. When employees feel that their personal needs are being considered, they are more likely to be engaged and committed. Only 14% of employees are very satisfied with their benefits [2], which is likely to be reflected within the workplace culture; a lack of motivation, high absence rates, low output could all be a direct result of not providing a comprehensive benefits package that employees feel satisfied with.
A quarter of employees who are ‘struggling to manage’ will be more likely to leave their job in the next 12 months [3] which underscores the importance of fostering a strong workplace culture and offering benefits that can promote and support it. A positive culture can create a better sense of community and collaboration, leading to a more cohesive and productive workforce.
Enhanced Employee Wellbeing
Employee wellbeing goes beyond physical health; it encompasses mental, financial and social health as well. A robust wellbeing programme can have a far-reaching impact on both the lives of employees and organisational performance. When employees are well-supported, they are less likely to experience burnout and more likely to perform at their best. Adopting a holistic approach to wellbeing not only improves individual performance but also contributes to a more vibrant and resilient workforce.
Provisions for wellbeing should remain authentic whilst being strategic, 27% of companies implement interventions because it ‘feels like the right thing to do’ [2]. It’s important to take a step back and choose interventions that align with the companies’ values, mission, and culture to see the best results from employee benefits.
Improved Company Reputation
Working practices and employee expectations are continuing to evolve, as the world we work in sees major changes, especially in the past few years. When the job market is more competitive than ever, a company’s reputation as an employer can make a significant difference.
Companies known for offering excellent benefits are more attractive to top talent, especially with the transparency that social media brings. Satisfied employees who speak positively about their employer can also attract potential hires through word-of-mouth. A solid reputation as a great place to work can provide a competitive edge in both attracting new talent and retaining existing employees.
Conclusion
Companies need to start looking past the immediate cost of investing in employee benefits as there are a host of multifaceted benefits such as reduced absence, reduced turnover, improved culture, enhanced reputation and better customer experience. Companies should strive to have a holistic approach to employee benefits and look at preventative solutions to future risks, sometimes it just takes small tweaks to existing employee benefits packages.
[1] https://www.clayhr.com/blog/link-between-employee-recognition-and-customer-satisfaction
[2] Wellbeing Revolution Survey 2024
[3] Mind The Gap 2023
